The Autonomy Activity Status of Multinational Subsidiaries

Research concerning the autonomy of subsidiaries has been concentrated on the possession of decision-making rights. Building on the definitional and empirical argumentation, we claim that so understood autonomy has a prospective character, is not equal to the implementation of actual actions (or lack of thereof) and neglects the issue of the scope of potential actions. This paper aims to fill in the current literature gap by offering a holistic stance in which we assert that subsidiaries can be meaningfully differentiated according to their levels of autonomy and corresponding actions. We base this argumentation on the findings of real option theory and competitive dynamics perspective, develop a typology specific to a subsidiary’s autonomy activity status (the position of a subsidiary in terms of its autonomy level confronted with the extent of actions taken in a corresponding area). We evaluate empirical validity of this approach on a sample of 377 foreign subsidiaries located in CEE countries. Our results (multinomial logit models) show that the proposed typology has the power to define internally consistent positions which are differentiated along four variables representing widely understood interdependencies within an MNE (sales dependence, sourcing dependence, technological dependence of the foreign investor upon the subsidiary and technological dependence of the subsidiary upon the MNE).